next47 One global startup unit to drive corporate innovation next47 Dr. Detlef Pohl October 11th, 2016 Restricted Siemens AG 2016 siemens.com/innovation
In the digital age, the drivers of innovation are changing In the 21 st century, innovation comes from a more flexible environment Innovation requires: Rapid prototyping Decentralized networks and clusters Crowdsourcing Open knowledge exchange Page 2
We have a proven track record of about 20 years partnering with start-ups Access to external innovators Contact established with more than 2,000 young companies per year More than 20 partnerships every year with start-ups worldwide Cooperation Foundation Investments Quick and flexible testing of ideas for new businesses More than a dozen start-ups founded Investing in innovative start-ups More than 800 million invested in over 180 start-ups Page 3
We are building our success on long history of Siemens called now next47 Siemens was founded 1847. So Siemens itself was a start-up in that year. The name next47 is intended to convey this entrepreneurial and pioneering spirit and reflect the goal of carrying over Siemens success to the next generation of innovations: next47. With his innovativeness, thirst for action and courage to take new approaches, Werner von Siemens created the foundations for the company s success. With the name next47, Siemens is thus paying homage to this important line of tradition in the year of its founder s 200 th birthday and continuing it. Page 4
We are sure: with next47 we will turn even more ideas into viable business Siemens Mission Fostering and anticipating disruptions and visionary opportunities, we invest in innovative ideas and turn them into viable businesses to fuel Siemens sustainable growth. We attract curious and entrepreneurial minds and create a dynamic organism to enhance Siemens approach to innovation. next47 Vision The world s premier address for innovative ventures shaping the future of electrification, automation and digitalization. Page 5
next47 will have a significant funding volume of approx. 1 billion Funding volume Funding will be primarily used for investing in, partnering and founding start-ups in selected innovation fields 1 Distributed electrification Artificial intelligence App. 1 billion in funds over 5 years Connected (e-)mobility Block-chain applications eaircraft Autonomous machines 1 Subject to constant review Page 6
The next47 strategy is based on four pillars We combine a diverse team of partners with the best of the Siemens ecosystem We use the lenses of EAD, paradigm shift, market disruption, and scalability to scout trends, select ideas and pursue ventures Strategy We invest by applying the full range of investment options; we nurture and develop innovative ideas and ventures with entrepreneurs $ We act within a start-up environment (e.g., rapid prototyping, fast failing / short-cycle learning, staged funding); protected yet not isolated Page 7
next47 supports start-ups along the entire venture lifecycle Venturing approach of next47 next47 will be established as an independent entity which offers freedom to experiment, to innovate and to grow in an early stage of the market development. Joe Kaeser, President and Chief Executive Officer of Siemens AG External start-ups External ideas Internal ideas Scout and select disruptive ideas, ventures and entrepreneurial minds Incubation Acceleration Growth Transfer/exit For idea owners Creation and nurturing of venture, e.g., via prototyping For young start-ups Transition towards commercialization through market rollout For mature start-ups Expansion of market share and gradual transformation into a global player Focus of next47 Page 8
Through next47, start-ups can benefit from the best of the Siemens ecosystem More than 32,000 researchers in global R&D 17,500 software engineers A team of experienced mentors and entrepreneurs next47 ensures a flexible and agile environment Siemens ecosystem comprises $ A team of investors/ venture capitalists Support functions such as marketing, legal advisory, etc. Fast prototyping Real data to test your algorithms The real business/markets to test the ideas Page 9
next47 will have offices in all of the world s innovation hotspots EUROPE Munich UNITED STATES Berkeley, Palo Alto, Boston ASIA Shanghai, Beijing ISRAEL Tel Aviv Page 10
Typical venture capital investment terms and conditions 1. Minority stake, usually <20%, invest balance sheet 2. No major blocking rights, expect others not to do either 3. Companies to apply basic governance rules to comply with internationally accepted standards 4. Pragmatic approach in the daily business 5. Quarterly reports (P&L, BS, cash flow, budget deviations) 6. Support companies by active Board participation (contacts to Siemens and beyond, financing out of the international VC network, strategy discussions, C-level recruiting, etc.) Page 11
Portfolio examples BlackDuck is a vendor of open source software (OSS) logistical management solutions. BlackDuck enables accelerated software development and reduced risk via centralized search, cataloging, and management of OSS elements as well as the automated governance, compliance, and security of a company s OSS. The company also provides M&A and consulting services to find, identify and assess the quality of open source code and provide customized strategies to evaluate and establish OSS governance practices Sternico Business provides an Business Intelligence & Maintenance Automation software and services. This software focuses on workshops and enables the workshops to handle all technical data (in the first application for wagons) and transfers and receives data according to VPI 08 European standard. Bayeco is a long-term dedicated clean-tech company in China, providing a wide range of efficient industrial pollution mitigation solutions. With specialization in control of industrial vaporized hazards, NOx and PM2.5, Bayeco delivers profound emission control systems integrating a variety of advanced technologies to oil terminals, depots, refineries, gas stations, chemical plants, and thermal plants, helping energy industry combat with China s long-standing air pollutions from aggravation. Page 12
Thank you Detlef Pohl Siemens Venture Capital GmbH Managing Partner Phone +49 (89) 636-46112 E-mail detlef.pohl@siemens.com Otto-Hahn-Ring 6 81739 Munich, Germany Page 13